Index Number Issues in the Consumer Price Index
This paper addresses the following issues: what is an appropriate theoretical consumer price index that statistical agencies should attempt to measure; what are some of the possible sources of biases between the fixed base Laspeyres price index that statistical agencies produce and the theoretical cost-of-living index; and what factors will make the biases larger or smaller and how will the biases change as the general inflation rate changes? This paper addresses all of the issues mentioned above and discusses what statistical agencies can do to reduce the biases.
Volume (Year): 12 (1998)
Issue (Month): 1 (Winter)
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- Jerry A. Hausman, 1996.
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- Lloyd, P J, 1975. "Substitution Effects and Biases in Nontrue Price Indices," American Economic Review, American Economic Association, vol. 65(3), pages 301-13, June.
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- Timothy F. Bresnahan & Robert J. Gordon, 1996. "The Economics of New Goods," NBER Books, National Bureau of Economic Research, Inc, number bres96-1.
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